Corporation Tax Act 2009 section 891

Realisation and acquisition of fungible assets

Section 891 provides identification rules for determining which pool of fungible assets is affected when such assets are bought or sold, preventing manipulation of the separate pooling rules.

• When a company holds fungible assets in two separate pools (pre- and post-April 2002), identification rules determine which pool is affected by any transaction.
• A disposal of fungible assets is matched first against assets acquired on the same day, then against those acquired in the previous nine days, and then against the appropriate pool.
• These rules prevent companies from artificially selling older assets and immediately repurchasing identical ones to bring them within the intangible fixed assets regime.
• Because fungible assets are interchangeable by nature, without these identification rules it would be easy to manipulate which tax regime applies to a given holding.